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We will not pursue the potential acquisition of FTX

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Re: We will not pursue the potential acquisition of FTX

#221

Post by papercrane »

iKlsR wrote: post #211
twblalock wrote: post #183

It's amazing how all of this was based on personal credibility, and a single Tweet caused the death spiral to start. Wells Fargo isn't going to go out of business if the CEO of Bank of America insults it on Twitter. But even if it did , there is FDIC insurance for deposits, and nobody whose balances were under the insurance limits will lose a penny. FTX succeeded solely based on the reputation and personal credibilit…

What tweet was that? Just seeing the news and trying to back track and get the context and leadup.

This is the tweet that's been credited with starting all this.

https://twitter.com/cz_binance/status/1589283421704290306

For context this tweet is referring to reports that a very large percentage of Alameda's holdings are FTT.

Re: We will not pursue the potential acquisition of FTX

#222

Post by nu11ptr »

potatototoo99 wrote: post #134
JumpCrisscross wrote: post #101

Earlier quoted context omitted.

> Binance has become a gold standard in crypto exchange business This was FTX and Alameda like a week ago.

Not really, FTX was barely in the top 10 for spot, though better in futures. Plus there are DEX and AMM.

FTX was #2 globally. Binance is #1. I'm not sure exactly what ranking mechanism is used to determine that, but that seems to be consensus from a variety of sources.

Re: We will not pursue the potential acquisition of FTX

#223

Post by tim333 »

SilasX wrote: post #152
JumpCrisscross wrote: post #13

In the thick of it, illiquidity and insolvency blur. But not after the fact. As usual, Levine put it best: “the problem is not a timing mismatch, in which FTX’s customers asked for their cash back but FTX did not have enough ready cash because it had long-term but money-good loans out. The problem is that FTX took its customers’ money and traded it for a pile of magic beans, and now the beans are worthless and there’…

That’s why I hate when people in these discussions refer to needing/providing “liquidity”. It feels like such a weasel word. Unless you know enough to conclude it’s really a cash flow mismatch, then don’t mince words or overcomplicate it. Money. They need some g/d m/fing money. Maybe they need it as arms-length loans on legitimately illiquid capital. Maybe they need underpriced loans for the risk of the business. May…

I agree "liquidity" is a cop out implying they need time to sell things.

In my case I deposited some USDC coins and have asked them to return said USDC coins but it seems no. I think theft is a more accurate term. As in we stole some customer funds to gamble with and having lost them need more funds to cover it up. Not really "liquidity".

Re: We will not pursue the potential acquisition of FTX

#224

Post by beansadding »

warinukraine wrote: post #29
JumpCrisscross wrote: post #13

In the thick of it, illiquidity and insolvency blur. But not after the fact. As usual, Levine put it best: “the problem is not a timing mismatch, in which FTX’s customers asked for their cash back but FTX did not have enough ready cash because it had long-term but money-good loans out. The problem is that FTX took its customers’ money and traded it for a pile of magic beans, and now the beans are worthless and there’…

Hah I called them magic beans yesterday! https://news.ycombinator.com/item?id=33524912

Baldrick, the ape creatures of the Indus have mastered this!

https://www.youtube.com/watch?v=g4IQjUpTNVU

Re: We will not pursue the potential acquisition of FTX

#225

Post by SantalBlush »

PathOfEclipse wrote: post #207
pseudosavant wrote: post #111

Earlier quoted context omitted.

FTX going under due to magic beans reminds me so much of Lehman Brothers going under in 2008. That time the magic beans were "mortgage backed securities" that somehow took low-quality debt, mixed it up with some magic, and out came high-quality debt, only it didn't.

"Certainly more study is needed on this issue. But the degree to which the Community Reinvestment Act (renewed and strengthened in 1995; see attached chart), the Home Mortgage Disclosure Act and the many other planks of the raft of federal regulation which have built up over the past couple of decades has pushed the banking industry into making the loans for which they are now being criticized is far and away the mos…

That banks extended bad loans under pressure from the government suggests they did so at a loss; otherwise, they would have done it anyway in search of profit. Moreover, Sowell makes bold claims and offers little evidence beyond references to redlining, while the evidence that banks were engaged in unethical and fraudulent practices are backed up by cold-hard data and an abundance of testimony from people within the industry. Sowell's essay is revisionism.

Re: We will not pursue the potential acquisition of FTX

#226

Post by vba616 »

ArtWomb wrote: post #143
simonjgreen wrote: post #99

Earlier quoted context omitted.

Wow I had forgotten all about that. I remember a lot of hype in the dot-com era around that

The NFTs of 1997: "etoy shares compel people to think about the elusive and amorphous nature of Internet art. One of the many controversies about Net art is that there is no original copy; an artist can’t exactly “sell” a home page to a collector. The “shares” play with the idea of ownership and the Net, as well as spoof absurdly overvalued Net stock" ;) https://www.villagevoice.com/1999/11/30/e-toy-story/

https://en.wikipedia.org/wiki/Flooz.com

"In 2001, Flooz.com was notified by the Federal Bureau of Investigation that a Russian-Filipino organized crime syndicate used $300,000 worth of Flooz and stolen credit card numbers as part of a money-laundering scheme, in which stolen credit cards were used to purchase currency and then redeemed.[2][3] Levitan has stated that fraudulent purchases accounted for 19% of consumer credit card transactions by mid-2001."

Re: We will not pursue the potential acquisition of FTX

#227

Post by throw474374383 »

kristjansson wrote: post #136
pseudosavant wrote: post #111

Earlier quoted context omitted.

FTX going under due to magic beans reminds me so much of Lehman Brothers going under in 2008. That time the magic beans were "mortgage backed securities" that somehow took low-quality debt, mixed it up with some magic, and out came high-quality debt, only it didn't.

The problem with MBS was always the zero-sum nature of the alchemy. They took 100 low-quality loans in, and returned 10 high-quality loans, 30 ok-ish loans, and 60 dog-shit loans. No harm no foul, until the dog-shit tranches were marketed as ok-ish, and alchemists believed they we're really creating gold.

I talked to a banker at the time (from BoA I think) and he said these things came about by the banks re-arranging the structure again and again, running it through the risk and credit rating algorithms and then tweaking and retrying until they got something with a good rating. So essentially that's like finding exploits in the other parties risk calculation algorithms or credit rating algorithms until you find some hack that labels crap as gold. So I think of it as hacking basically. The banks figured out how to hack Moody's algorithms, as it were.

Don't forget through all of that madness Moody's was rating utter crap as AAA

https://en.m.wikipedia.org/wiki/Credit_rating_agencies_and_t...

Re: We will not pursue the potential acquisition of FTX

#228

Post by mscarborough »

PathOfEclipse wrote: post #207
pseudosavant wrote: post #111

Earlier quoted context omitted.

FTX going under due to magic beans reminds me so much of Lehman Brothers going under in 2008. That time the magic beans were "mortgage backed securities" that somehow took low-quality debt, mixed it up with some magic, and out came high-quality debt, only it didn't.

"Certainly more study is needed on this issue. But the degree to which the Community Reinvestment Act (renewed and strengthened in 1995; see attached chart), the Home Mortgage Disclosure Act and the many other planks of the raft of federal regulation which have built up over the past couple of decades has pushed the banking industry into making the loans for which they are now being criticized is far and away the mos…

Making the subprime loans in the first place doesn't necessitate packing them into opaque financial instruments and going bananas with the wildly over-leveraged profit-seeking.

Financial firms has been making tons of money during decades of increasing wealth inequality. Sure, let's talk about these congressional acts, but not going to put a lot of blame on relatively small programs that required these firms to throw back some scraps.

Re: We will not pursue the potential acquisition of FTX

#229

Post by spiantino »

Animatronio wrote: post #79
eddsh1994 wrote: post #69

Earlier quoted context omitted.

Basically any r/cc user who was in FTX and wants to invest part of their next paycheck?

As the saying goes "Fool me once ..."

I think the point of that saying is that when you get fooled a second time you have nobody to blame but yourself

Re: We will not pursue the potential acquisition of FTX

#230

Post by d3nj4l »

JumpCrisscross wrote: post #13

In the thick of it, illiquidity and insolvency blur. But not after the fact. As usual, Levine put it best: “the problem is not a timing mismatch, in which FTX’s customers asked for their cash back but FTX did not have enough ready cash because it had long-term but money-good loans out. The problem is that FTX took its customers’ money and traded it for a pile of magic beans, and now the beans are worthless and there’…

Levine on SBF back in April:

> I think of myself as like a fairly cynical person. And that was so much more cynical than how I would've described farming. You're just like, well, I'm in the Ponzi business and it's pretty good.

I suppose he was right ;)

https://www.bloomberg.com/news/articles/2022-04-25/sam-bankm...

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